Rewiring the system: ASIC consults on financial market infrastructure guidance

Following the commencement of Australia’s reformed financial market infrastructure (FMI) regime late last year under the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024 (Cth), ASIC has released Consultation Paper 50 (CS 50).

CS 50 proposes targeted updates to ASIC’s regulatory guidance to give practical effect to the new framework and ASIC’s expanded powers.

What guidance is changing?

ASIC is proposing updates to three cornerstone Regulatory Guides:

• RG 172 Financial markets: Domestic and overseas operators;

• RG 249 Derivative trade repositories; and

• RG 268 Licensing regime for financial benchmark administrators.

  
  

Together, these guides apply to the vast majority of entities that enable, facilitate, and support trading in Australia’s capital markets.

Why these reforms matter

The changes implement long‑standing recommendations from the Council of Financial Regulators (July 2020), aimed at addressing three structural weaknesses in Australia’s FMI regime:

1. Crisis management and resolution: enabling FMIs to be stabilised or resolved without systemic disruption

2. Licensing enhancements: modernising licensing frameworks to reflect operational complexity and cross-border activity; and

3. Stronger supervision and enforcement: giving regulators earlier and sharper intervention tools.

What is CS 50?

Broadly, CS 50 aims to:

• align ASIC’s guidance with the reformed legislative framework and expanded powers;

• explain how ASIC will apply new statutory concepts introduced by the FMI reforms;

• promote consistency in definitions and regulatory approach across FMI settings; and

• streamline and “market‑neutralise” guidance by removing outdated and ASX‑centric assumptions.

Key themes and practical takeaways

Key issue	Summary of changes
New statutory concepts explained	CS 50 provides ASIC’s first detailed articulation of how it will apply several new statutory concepts, including: the 'material connection test' for overseas entities, replacing the more impressionistic 'targeting Australia' analysis; 'fit and proper' and 'capability' obligations for core officers; and the expanded control and ownership approval regime.
Market neutrality and simplification	Legacy references are stripped out, guidance is consolidated, and assumptions tied to a single market operator model are wound back — signalling a more flexible, market‑neutral approach.
Transfer of Ministerial powers to ASIC	The guidance reflects ASIC’s shift from adviser to decision‑maker, following the transfer of key powers from the Minister. ASIC now directly determines licence grants, conditions, suspensions, cancellations and rule disallowance — aligning Australia more closely with international FMI supervision models.
Sharper Governance expectations	Across RG 172, RG 249 and RG 268, ASIC reinforces expectations that licensees actively monitor and document the fitness, propriety and capability of core officers. While the legislation sets high level obligations, ASIC flags it will draw on familiar AFSL, credit and ADI fit‑and‑proper frameworks when assessing compliance.
Overseas entities: trigger for licensure	The updated guidance reflects a statutory two‑step test for offshore FMIs: is there a connection with Australia? and if so, is that connection material?
Control and ownership approvals	The consultation also explains the new requirement for ASIC approval where ownership or voting power exceeds 20% in a domestically incorporated FMI licensee. ASIC applies a legitimate control test, and CS 50 clarifies that: ownership approvals are assessed separately from licence applications; and approvals may be considered concurrently but are not automatically bundled.
Expanded supervisory toolkit	The guidance highlights ASIC’s enhanced information‑gathering and supervisory powers, including the ability to require licensee‑funded expert reports, suspend or cancel licences due to inactivity, and intervene earlier where emerging risks are identified.

For FMI operators, now is a timely chance to consider the impact of the new rules, revisit cross‑border assumptions and engage early with ASIC, while the regime and ASIC’s supervisory posture is still taking shape.

Submissions on CS 50 can be made to submissions-fmi.reforms@asic.gov.au until 25 May 2026.

Written by Steven Pettigrove, Katrina Sharman and Tahlia Kelly